If you blinked you may have missed the spring/summer peak gasoline price of $2.93 a gallon set on May 6, a high not seen since October 2008. Since then prices have begun a steady retreat away from what was thought to be the inevitable $3.00 a gallon mark to $2.88 on Friday. This is welcome news for motorists with the Memorial Day travel weekend less than two weeks away. Current prices are 60 cents higher than a year ago, but still $1.23 less than the record high set in July 2008.
Crude oil saw movement in a similar direction this week. After posting gains of more than $3 a gallon in Monday’s trading, crude oil has reversed and fallen in four straight sessions to hit a three-month low on Friday closing at $71.61 for the week. Large U.S. crude inventories, a factor that has not weighed on the oil market in recent months, and concerns that the European debt crisis will curb energy demand growth have contributed to crude oil’s dramatic losses this week.
The Energy Information Association’s (EIA) weekly report showed crude stocks grew by 1.9 million barrels to 362.5 million barrels, the seventh consecutive week crude inventories have been above 350 million barrels. Gasoline stocks dropped more than expected, shedding 2.9 million barrels to 222.1 million barrels.
The Weekend
“After tracking toward what analysts thought was the inevitable $3.00 a gallon mark earlier this month, gas prices have retreated in recent days leading many to believe we may have already seen the peak price for the spring/summer driving season,” said Tracy E. Noble, Manager of Public and Government Affairs for AAA Mid-Atlantic. “Analysts believe its more likely that gas prices will continue to retreat toward the $2.75 a gallon mark for the first half of the year, rather than advance toward the $3.00 a gallon mark. Of course, this would be welcome news for motorists looking ahead to the Memorial Day holiday weekend and the official start of the summer driving season.”
The Week Ahead
All eyes continue to watch as crews expand efforts to contain the major oil spill in the Gulf of Mexico that threatens the ecosystem and the economy of the Gulf region and beyond. The heart of U.S. energy production is here and only time will tell how far and wide the spill’s effects will be. This situation holds several variables that will undoubtedly have an economic impact on consumers, but at this time it’s still too early to determine just how far and wide such effects will be felt.
CURRENT AND PAST GAS PRICE AVERAGES
Regular Unleaded Gasoline (*indicates record high)
5/14/10 | Week Ago | Year Ago | |
National | $2.88 | $2.92 | $2.28 |
New Jersey | $2.78 | $2.81 | $2.15 |
Trenton | $2.82 | $2.83 | $2.17 |
Cape May County | $2.77 | $2.79 | $2.11 |
Burlington County | $2.76 | $2.78 | $2.15 |
Middlesex, Somerset, Hunterdon | $2.80 | $2.82 | $2.15 |
Monmouth, Ocean Counties | $2.77 | $2.80 | $2.13 |
Crude Oil | $71.61per barrel (close on Friday) | $75.11 per barrel | $50 per barrel |
